How Lucrative Festive Season Short-Term Letting Boosts Property Values
Every December, South Africa’s coastal property markets come alive as holidaymakers search for short-term letting in key locations, Cape Town, the KZN North Coast, and the Garden Route among them. While this is a massive financial boost for homeowners, the impact goes beyond this annual ‘gold rush’, with property valuations boosted by this growing demand.
“Short-term letting has evolved from a side hustle into a legitimate investment strategy,” explains Grant Smee, CEO of Only Realty Property Group. “Platforms like Airbnb, Booking.com and SA-Venues have transformed the way South Africans use their investment properties, allowing owners to generate income and maintain occupancy year-round if they choose.
“Homes that perform well as festive rentals increasingly command a premium in the sales market because of the income-generating potential, turning tourism performance into a key factor when investing in property.”
The Festive Season Boom
According to data from Airbtics, a short-term rental market research and analytics platform, South Africa’s top short-term rental markets consistently outperform during December and early January.
Cape Town leads with an average occupancy rate of 71%, generating an average annual revenue of R433,000 per listing and an average daily rate of R1,719. On KZN’s North Coast, hosts earn an average of R479,000 annually, while Durban and Johannesburg see strong domestic demand, averaging R258,000 and R154,000 respectively per year.
“These numbers show just how lucrative festive-season letting can be,” Smee explains. “While coastal markets experience the biggest surge, urban hubs like Sandton and Rosebank are also seeing an uptick as domestic travellers mix leisure with work, and families return home for the holidays.”
But Smee says these benefits don’t necessarily end when the festive season does: “Year-round short-stay demand from digital nomads and business travellers has made short-term letting a consistent value driver. We’ve seen apartments near airports, universities or mixed-use nodes performing well throughout the year, which bolsters property values.”
Boost for Property Values
Smee notes that such short-term rentals generate impressive yields while increasing long-term capital appreciation. High-performing holiday homes tend to attract investor interest, especially when the rental history shows reliable income and strong occupancy.
“We’re increasingly seeing agents highlight short-term rental potential in listings. Buyers are willing to pay a premium for properties with proven track records, particularly those located in regulated estates or popular tourist areas,” comments Smee.
However, he cautions that poor management or excessive turnover can have the opposite effect: “If short-term tenants disrupt neighbours or neglect property rules, it can damage the complex’s reputation and, ultimately, impact property values negatively. This is where regulation becomes essential.”
Understanding the Rules and Regulations
South Africa’s short-term letting landscape is gradually becoming more clearly defined. Smee explains that the Rental Housing Act governs all landlord-tenant relationships, including those facilitated through online platforms:
“Lease agreements and property maintenance responsibilities are all subject to the Act, even for short stays,” he says, “At a municipal level, Cape Town’s 2019 by-law restricts short-term rentals to 30 consecutive days per booking as a way to balance tourism demand with residential stability.”
More recently, a Gauteng High Court ruling involving The Blyde Riverwalk Estate in Pretoria affirmed that homeowners’ associations (HOAs) and body corporates are entitled to regulate or restrict short-term rentals.
“The judgment recognised short-term letting as a commercial activity, meaning HOAs may enforce stricter conduct rules to preserve the residential nature and safety of their communities,” said Smee. “This is an important step in providing clarity and protection for both investors and residents. Well-managed rentals add, rather than detract, from the investment appeal.”
Top Tips for Short-Term Letting Success
For homeowners looking to maximise their festive rental returns, Smee shares a few essential strategies:
- Prioritise guest experience: Professional photos, spotless presentation, and thoughtful touches like welcome packs and digital guidebooks can make a lasting impression.
- Invest in quick turnovers: The festive season brings high booking frequency, so it’s worth partnering with cleaning services to ensure same-day readiness and maintain five-star reviews.
- Stage for your market: A Sandton apartment should highlight workspace and Wi-Fi speed, while coastal homes should showcase outdoor areas, pools and load-shedding readiness.
- Adopt flexible pricing: Use real-time pricing tools or manually track demand spikes around public holidays and local events. Adjusting rates strategically can lift yields by 10 to 20%.
- Comply and protect: Ensure your property meets municipal bylaws, is insured for commercial activity and that taxes are correctly filed. SARS requires rental income declarations, but deductible expenses such as cleaning, maintenance and agent fees can significantly offset costs.
“It’s important to find the balance between profitability and sustainability,” concludes Smee. “Well-run short-term rentals enhance property values and investor confidence. The December rental boom may last only a few weeks, but its influence on South Africa’s property market endures year-round. Capitalising on the festive letting season could unlock short-term returns and long-term capital growth.
